Is the Chromebook a Threat to Microsoft's OS Domination?

Despite the ongoing slump of PC sales, Microsoft (NASDAQ: MSFT  ) recently received news that gave it reason to celebrate. At the beginning of December, the market share for its Windows 8.1 update had increased to the point that it edged Apple's OS X Mavericks out of the top five installed operating systems; this left only Windows products in the list (which also includes Windows 7, Windows XP, Windows 8, and Windows Vista.) While it's true that Windows 8.1 only reported 2.6% of the installed market, when the rollout for Windows 8 and 8.1 has had as many problems as Microsoft has seen, even little victories are worth celebrating.

The OS data, compiled by Net Applications, lists two versions of OS X beneath Windows 8.1, as well as a catch-all category labeled "Other." It's this latter category that contains your various versions of Linux, FreeBSD, and other operating systems that you might reasonably see installed on a desktop or laptop computer. One of these "other" systems is starting to make a splash, however, and in time may make a strong enough showing to rate its own listing in the results.

Enter the Chromebook
Last year, Google's (NASDAQ: GOOGL  ) Chromebook barely moved the needle when it came to sales; according to tracking data from the NDP Group, the 400,000 Chromebooks sold in 2012 only accounted for a negligible share of notebook computers sold during the year. Jump forward to 2013, and the 1.76 million Chromebooks sold between January and November accounted for an impressive 21% of all notebook sales tracked by NDP.

Of course, it's important to point out that this increase was only seen within the transactions that NDP tracked and that the company didn't track every notebook, tablet, and computer sale that occurred in either year. According to NDP's data, a total of 14.4 million combined sales of notebooks, tablets, and other computers was tracked through commercial outlets in the United States during the year. While you can still extrapolate a lot of data from these figures, it's important not to jump on the bandwagon and assume that the 21% figure represents global sales or includes every transaction made in 2013.

Microsoft on the offensive
Not content to wait and see how much of a threat the Chromebooks eventually pose, Microsoft has doubled down on its anti-Google "Don't Get Scroogled" campaign. The new campaign push highlights reasons consumers might regret buying a Chromebook, including the need for an Internet connection for all features to work and the fact that "favorite" Windows programs won't run on the notebooks. (Of course, some might argue that this last reason is part of the point of the Chromebook ... an easy-to-use way for people to break away from the Windows environment.)

Microsoft's previous "Scroogled" campaigns were met with moderate success. Approximately 54% of individuals surveyed after seeing the Google Search "Scroogled" ads correctly identified Google as the target and said they would consider Bing as an alternative. The Gmail "Scroogled" campaign was accompanied by a petition that to date has amassed over 150,000 signatures (though one should always wonder just where some of the traffic comes from with popular online petitions.)

It remains to be seen just how effective the current "Scroogled" campaign will be, but it's possible that it will have an influence on at least a portion of comsumers who are on the fence about buying a Chromebook. Given Microsoft's cross-promotion of partners' laptops "starting at $249" on Scroogled.com, it may even help a few budget-conscious consumers to buy a new Windows notebook instead.

The bottom line
Chromebooks are growing in popularity, especially among people who have easy access to the Internet and who already use a number of Google products (since it doesn't matter if the notebook can install Office if the user prefers Google Docs anyway.) They still fall in the "other" category when tracking OS usage, but if their popularity continues to grow, it's possible that Chrome OS could become a major contender a few years down the road.

Before this happens, however, Microsoft (and to a lesser extent, Apple) is going to pull out all of the stops to downplay the Chromebook and make it seem undesirable to those who want a "real" notebook. While it's doubtful that Microsoft's efforts will have a major impact on Chromebook sales, there's a very real possibility that at least some consumers could be swayed by Microsoft's (rather one-sided) talking points.

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  • Report this Comment On December 31, 2013, at 3:23 PM, kellenbmiller wrote:

    Since it is open source Microsoft should just use it but tweak it for themselves. Just like google would do. Its free. Incorporate it into windows with out Google search. Yup. Make impossible to install or use google search. Attach adds to Google or make pop up annoyingly Just like it (google search) allows it high paying clients to do.

  • Report this Comment On December 31, 2013, at 9:22 PM, KenLuskin wrote:

    Chrome book sales were greatly OVER estimated based upon a small sample size among B to B vendors in the US only..

    NPD should be ashamed of themselves for this horrible reporting.

    Chrome book may account for 2% of total lap top sale up from 1%... NO where close to 21% reported by NPD.

    Most businesses will NOT be able to use Chrome books. Too many other businesses require MSFT business software to communicate effectively... If you canNOT open up a world document from a business partner... what do you do?

    Maybe in some schools where the Google foundation is making large grants to purchase Chrome books.

    Remember for years Apple claimed to have a large % of usage... yet Apple NON mobile computer sales still stuck at about 10%....

    If you ever use your lap top to connect to a printer You will be in deep trouble when you realize your printer will NOT work with Chrome book.

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